Kim Loong to Expand into Bio-Gas Power Supply Soon
Kim Loong Resources Bhd’s expansion plan to supply biogas-based power for sale to Tenaga Nasional Bhd’s electricity grid is poised to take off soon.
According to managing director Gooi Seong Heen, the group is expected to supply 1.8MW generated from its Kota Tinggi mill in Johor to the national grid by end of this year.
He said: “Our Kota Tinggi mill is close to completing the installation and commissioning of the power plant.
“So far, the plantation and palm oil milling group had obtained the Feed-in-Tariff (FIT) approvals from the Sustainable Electricity Development Authority (Seda) to supply a combined 3.8 MW power generated from its palm oil mills in Kota Tinggi, Johor and Keningau, Sabah.
“We have received FIT approval from Seda for 2MW for our Keningau mill,” Gooi told StarBiz, adding that Kim Loong group was in the process of signing the power purchase agreement with Sabah Energy Sdn Bhd (SESB), the integrated utility company for Sabah and Labuan.
The group also hoped to be able to commission the power plant in Keningau by end of 2018, he noted.
It has been Kim Loong’s plan to generate power from biogas for sale to Tenaga and SESB grid from all its mills, Kota Tinggi in Johor as well as Keningau and Telupid in Sabah, explained Gooi.
He added that the group is in the midst of obtaining approval for another 2MW for the Telupid mill.
According to Gooi, the group’s expansion into biogas and power generation is expected to provide an additional revenue to its existing businesses.
“Upon successful implementation, at full capacity, we hope to receive about RM6mil per year from each mill.
“Owing to the high value of raw materials – crude palm oil (CPO) and palm kernel, revenue from the sale of electricity will only constitute 1% to 2% of total turnover.
“However, because of low operating costs, net profit from this operation may amount to 20% to 40% of total net profit from each mill,” Gooi pointed out.
Kim Loong Group also claimed to own the first biogas project in Malaysia.
Currently, all its three palm oil mills have methane capturing facilities to reduce greenhouse gas emission into the atmosphere.
With the project of capturing methane gas implemented, the Group has successfully commissioned the utilisation of the biogas in gas engines with total installed capacity of 3.5MW to support the power needs by operations and together with better efficiency boiler/turbine, and thus reduced the usage of diesel by gen-set at mills by at least 60% and also reduced the burning of palm kernel shells.
On its upstream plantation operation, Gooi said the group was actively looking for suitable plantation land bank in Johor, Pahang, Sabah and Sarawak.
“Unfortunately, various contraints have limited our prospect,” he added.
For the current financial year ending Jan 31, 2018 (FY2018), Kim Loong has budgeted RM30mil for replanting activities and mill expansion of its existing assets.
He added: “We shall not allocate any capex for new mill or plantation land acquisition until such projects are more certain.”
The group’s total plantation land holdings stood at 15,919ha, of which 94% are fully planted with oil palms.
Out of the total planted area, about 83% are mature above six years old, 12% are young mature below six years old while the remaining 5% are at immature stage.
Its three palm oil mills have a total fresh fruit bunches (FFB) processing capacity of 1.5 million tonnes per annum. Its Kota Tinggi mill is one of the largest commercial palm oil mills in Malaysia in terms of tonnage of CPO production.
In order to facilitate the group’s progress and development in Sarawak, Gooi said Kim Loong has been looking into the possibility of setting up a palm oil mill in Sarawak and will continue to source for additional plantation land in Johor, Pahang, Sabah and Sarawak for expansion.
The group remains committed in its effort to improve efficiency and at the same time generate income from palm oil mill wastes through new innovation and technology, added Gooi.
For the second quarter FY2018, Kim Loong reported net profit of RM33.4mil, which improved 5.2% year-on-year and surged 66.6% quarter-on-quarter.
Cumulatively, the six month FY2018 net profit almost doubled to RM65.2mil from the same period in FY2017.
On Bursa Malaysia last Friday, Kim Loong share price closed three sen higher at RM4.46 with a market capitalisation of RM1.39bil.
Source: http://www.thestar.com.my/business/business-news/2017/10/16/kim-loong-to-expand-into-biogas-power-supply-soon/ 16/10/2017